The optimal choice of a monetary policy instrument depends on how tight and transparent the available instruments are and on whether policymakers can commit to future policies. Tightness is always desirable; transparency is only if policymakers cannot commit. Interest rates, which can be made...

In 2008, governments in many countries embarked on large fiscal expenditure programmes, with the intention to support the economy and prevent a more serious recession. In this study, the overall impact of a substantial increase in fiscal expenditure is considered by providing a novel analysis of...

We study monetary policy in a model where long-term interest rate variability dampens the fiscal multiplier. A fixed money supply limits this variability. Moreover, a flexible money supply rule that only responds to government spending, and is otherwise fixed, further amplifies the fiscal...

In this paper we present a fixprice model in which public and private consumption show some degree of substitution. We offer formulae for the Keynesian multiplier which depend on the degree of substitution. We also show that there is a Pigou effect and that this effesct might be larger than the...

I use micro data to quantify key features of U.S. firm financing. In particular, I establish that a substantial 35% of firms' investment is funded using financial markets. I then construct a dynamic equilibrium model that matches these features and fit the model to business cycle data using...

The present work estimates collected seigniorage levels in the Venezuelan economy from 1994Q1 to 2018Q2 and tries to determine when and if a seigniorage-maximizing inflation rate occurred and this way provide a rational on the development of hyperinflation in the country. Results suggest that...

The biggest and most well-known unsolved problem in academic finance is famously referred to as the Equity Premium Puzzle. It refers to the unexplained phenomenon that for over 100 years the average return on a well-diversified portfolio of equities has far outperformed that of risk-free,...

This paper contributes to the GDP-consumption co-movement puzzle literature investigating the role of tax evasion in explaining the consumption path after a Marginal Efficiency of Investment shock. We use an otherwise standard medium-scale New Keynesian DSGE model combining tax evasion with...

Existence of phenomena such as unemployment and low earnings of the poorest social strata in both periods of recession and the economic boom, highlights the existence of root causes in society. Providing answers to the question: what are the causes and the solutions can be implemented to solve...